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The velocity of money has a lot to do with inflation. How many times per year is a given dollar spent? The assumption is that as the pandemic ends that this ve
by mikem170 6y ago
The velocity of money has a lot to do with inflation. How many times per year is a given dollar spent?
The assumption is that as the pandemic ends that this velocity measurement will increase, that people will be out buying and selling things a lot more than they have been for the last year.
The size of the money supply was increased significantly over the last year, due to the trillions in federal stimulus injected into the economy. This was done presumably to prevent many businesses and households from becoming financially insolvent. This is also considered to be inflationary.